Kathmandu, November 11

Alleging that banks are importing gold without studying the market demand, domestic dealers of gold jewellery have urged the government to allow even the jewellers to import gold.

At the fourth annual general meeting (AGM) of the Federation of Nepal Gold and Silver Dealers' Association (Fenegosida) in the Capital today, dealers said the commercials banks that have been authorised to import gold have not been supplying the yellow metal as per demand in the market resulting in supply-demand mismatch of gold time and time again.

“Since there is no competitor in the market, banks have been arbitrarily importing gold which is not in line with the demand in the market,” Mani Ratna Shakya, president of Fenegosida said, adding that banks are also keeping a high profit margin while selling gold to jewellers. Moreover, Shakya also said that commercial banks don’t have uniformity in profit margin.

As per existing laws, only commercial banks in the country are allowed to import gold in big amounts while returning migrant workers are allowed to bring up to 50 grams of gold.

Shakya further said small dealers find it difficult to purchase gold from commercial banks as they are often reluctant to sell less than one kilogram of gold to dealers, though the government has directed banks to sell even small bars of gold to jewellers.

If the government also permitted jewellers to import gold, it would not only create healthy competition in the market, but also reduce illegal smuggling of gold which is still rampant in Nepal, according to Shakya.

Similarly, he also highlighted the problems faced by jewellers outside the Kathmandu Valley due to the tendency of commercial banks to sell gold to jewellers only through their Kathmandu-based branches.

On the occasion, Pashupati Murarka, president of the Federation of Nepalese Chambers of Commerce and Industry, criticised the government for not giving ample priority to challenges existing in the country’s bullion industry.

“Since long we have been urging the government to increase import quota of gold for banks so that the market does not have to face gold crunch during festive seasons. However, this problem still exists today,” he said.

Murarka echoed Shakya’s demand that the government give dealers the authority to import gold so that the commodity can be supplied as per the market demand.

Currently, Nepal Rastra Bank (NRB) has authorised commercial banks to import 15 kilograms of gold in a day.

During the event, Deputy Governor of NRB Chinta Mani Siwakoti, said that dealers should support NRB and the government to control ongoing smuggling of the precious metal in the Nepali market. “We will look into the prospects of increasing import quota of gold. However, jewellers should discourage the smuggling of gold by purchasing the precious yellow metal only through banks,” said Siwakoti.